The European Union’s digital euro legislation has moved into its final negotiating stage, with the European Parliament, the Council and the European Commission holding trilogue talks aimed at reaching a political agreement before the end of 2026. According to a legal analysis published by Freshfields, both the Council and Parliament mandates agree that individual holdings of the digital euro must be capped to stop the currency from becoming a store of value that could destabilise bank deposits, but the two sides disagree over which institution gets to set that ceiling. The Parliament wants the European Commission to set the cap by delegated act, informed by an ECB recommendation that lawmakers could reject but not amend, while the Council wants the limit fixed through a qualified-majority vote among member states, keeping the decision closer to national governments.
The European Central Bank has told co-legislators, in a statement covered by the ECB’s own October 2025 press release, that the whole Eurosystem should be ready for a first possible issuance of the digital euro during 2029, assuming the regulation is adopted sometime in 2026. That same release states that holding limits and other design safeguards are intended to ensure the digital euro does not create financial stability risks, and that the costs to banks will stay close to the Commission’s original estimates.
Pilot programme moves ahead of the legislation
Separately from the political negotiations, the ECB has already picked the firms that will test a working version of the system. Reporting from Crypto News Flash states that the ECB selected 36 banks, fintechs and payment processors in July from more than 50 applicants, and that the group, which includes Deutsche Bank, UniCredit, Revolut, Stripe and Adyen, will begin connecting to the Eurosystem’s infrastructure this year ahead of a year-long operational trial due to start in the second half of 2027. The outlet notes that the beta digital euro tested in that pilot will not carry legal-tender status and does not amount to a final decision to issue the currency, since that decision still depends on the legislation passing and on a subsequent vote by the ECB’s Governing Council.
Reuters, in an explainer published in July, similarly describes a pilot phase due to start next year involving roughly 40 banks and payment companies, with a possible 2029 launch to follow, according to its own account of the timeline reported by Reuters.
On privacy, officials quoted by RFI have said the system is designed so that no one would be able to identify who made a transaction, and that offline payments would be as confidential as cash. Yet the Freshfields analysis of the negotiating texts notes that the Council has inserted specific rules describing how the system checks that an offline payment is genuine, which necessarily involves some data processing by payment service providers, national central banks or the ECB itself. The Parliament’s text takes a different technical approach to those same safeguards while emphasising alignment with existing EU data protection law, according to the same analysis, meaning the exact privacy architecture is still being negotiated rather than settled.
Coverage from Euronews reports that fee-sharing among merchants, banks and payment providers remains one of the most contested items still on the table, and that negotiators have been told to work toward finalising the file by the end of the year.
How the outlets framed it
The ECB’s own press material presents the digital euro as a carefully engineered modernisation project, emphasising that holding limits and other safeguards will keep costs low for banks and avoid financial instability, with the 2029 target framed as an orderly technical milestone. Freshfields, writing for a legal and corporate audience, instead treats the unresolved question of who controls the holding cap and how offline verification works as the central unresolved political fight, not a settled detail. RFI’s coverage foregrounds official assurances that privacy will be preserved and that offline payments will function like cash, while the same negotiating texts described by Freshfields show the Council building in specific verification rules that involve some data processing. The difference is not about the underlying facts of the timetable, which all the sources describe consistently, but about whether the privacy guarantees and the holding-cap mechanics are treated as finished business or as the live disputes they remain.
None of the currently public texts eliminates cash or forces citizens onto the digital euro, and the ECB continues to describe the new currency as a complement to cash rather than a replacement for it. Whether that description survives once holding limits, the wallet-cap authority and the offline privacy rules are all locked in together before the end of 2026 is the question the coming months of trilogue negotiation will answer.
